Valuation pre earnings

[doppelg36]

I appreciated Ant’s perspective on the different stages of company progression

http://discussion.fool.com/high-growth-the-path-to-profitability…

My plan is to go back and read the alluded to “mid-year” as I’m sure there was some debate as less mature companies were discussed… But I was wondering if anyone had any advice on how to evaluate companies that have not yet grown into profitability (or haven’t been profitable long). I’ve seen some mentions of EV/EVITDA and P/S, and identifying TAM and talk about margins. Obviously, it’s good to have multiple tools in your toolbox, but I was wondering if some worked particularly well in certain situations.

I’m looking to start some “Saul approved” positions. I can easily observe Arista growing earnings and use that to make projections. I’m much hazier on how to translate Shopify’s numbers… some predicted margin x some predicted near-future revenue?

Thanks,
dg

[PaulWBryant]

I’m looking to start some “Saul approved” positions. I can easily observe Arista growing earnings and use that to make projections. I’m much hazier on how to translate Shopify’s numbers… some predicted margin x some predicted near-future revenue?

Doppelg36, in short, yes. My best response is the post I just wrote: http://discussion.fool.com/marginal-thinking-update-32931491.asp…

Heed all the warnings about it being a very rough estimate. You could throw in your estimated expected margin for each company as you said instead of using 30% for all. But I find it interesting to compare apples to apples for the valuation, and then adjust in my head since the companies aren’t really apples to apples.

Hope that helps.

Bear